Heiken Ashi is an Apps that has been gaining its fame of late, while it was rather even not known before. It came in to existence just few years ago to progress the analysis of the formations of the candlesticks, which was learned since the year 1700 in Japan with the grain merchants. This Indicator is supposed to eradicate noise from candlesticks and also to act more of moving average. The traders follow this Heiken Ashi pattern to establish relative strength of the trend and also to showcase the main turning points in the price behavior.
This indicator of Heiken Ashi considers the basic candle stick data, the open, the close, the low, and then smoothens the inconsistent parts of chart depiction in the similar way as of the moving averages. The traders now can make better decision without any interruption that had been caused by the volatile actions of the price.
Formula of Heiken Ashi
This Heiken Ashi is widespread on the Metatrader4 trading platform and the mathematical calculation evens the information of the pricing by following the below averages:
1. Close = Sum of open price,close, low, high divided by 4.
2. Open = The average of the Open Price / Close Price in previous bar
3. High = Max value of (close, High, Open)
4. Low = Min value of ( Open, Close,low)
The software platform normally keep Heiken Ashi beside the present formations of candlestick to offer the traders a full view. If you look at the Chart depiction, Heiken Ashi bars will be shown by the images of red and the white colour placed over the prevalent green candlesticks. Though it will take some period of time to get known to these chart presentations, one can instantly get acquainted with the momentum price building from each of the recessions that experienced the 82.54 support level for USD / JPY chart of 15 minutes.
Main advantage of this indicator is the visual ease from the chart. The trading means emerge as tightly formed and the main trends can be easily followed and detected. Anyways, it is advised to use this indicator along with other indicator to get the correct confirmation of the analysis.